Attached files
| file | filename |
|---|---|
| 8-K - INTERLEUKIN GENETICS INC | v201902_8k.htm |
| EX-99.1 - INTERLEUKIN GENETICS INC | v201902_ex99-1.htm |
Exhibit
99.2
Interleukin
Genetics
Q3 2010
Conference Call
Operator:
Good
afternoon ladies and gentlemen. Welcome to the Interleukin Genetics 2010 Third
quarter earnings results conference call. At this time all
participants are in a listen-only mode. We will be facilitating a question and
answer session at the end of today's conference. I would now like to
turn the call over to the Interleukin Genetics team. Please
proceed.
Erin
Walsh:
Thank you
and good afternoon. My name is Erin Walsh of Interleukin
Genetics. I would like to welcome you to today’s conference call and
webcast to discuss Interleukin Genetics’ Third Quarter earnings
results. With me today from Interleukin Genetics are:
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Lewis
Bender, CEO;
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Eliot
Lurier, CFO;
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Ken
Kornman, President and Chief Scientific
Officer
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Eliot
will first provide a review of the financials for the quarter and Lew will
follow with a review of our corporate developments. We will then conduct a
question and answer session.
Before we
begin the call, I would like to remind you that today's discussion will contain
forward-looking statements that involve risks and uncertainties. These risks and
uncertainties are outlined in Interleukin’s filings with the Securities and
Exchange Commission. As such, actual results may differ materially from what is
discussed on today's call.
I will
now turn the call over to Eliot Lurier, CFO.
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ELIOT
LURIER:
Thank you
Erin:
Good
afternoon everyone. By now we hope you have seen our earnings press release
issued before this call. It is my pleasure to provide the financial results for
the quarter ended September 30, 2010 for Interleukin Genetics.
At
September 30th, we had cash and cash equivalents of $5.2 million and borrowings
available under our credit facility of $3.3 million. In addition, on
September 30, 2010 we borrowed an additional $2.0 million on our line of credit
with Alticor and extended the due date and the ability to borrow on our line of
credit to June 30, 2012.
Total
revenue for the quarter from continuing operations was $545
thousand compared to $323 thousand for the same period in 2009. The
increase in revenue is primarily attributable to an increase in genetic testing
revenue offset by a decrease in contract research revenue. Genetic testing
revenue increased $412 thousand or 345% to $531 thousand compared to $119
thousand in the third quarter of last year primarily due to media coverage and
other promotional activities that continue to positively impact sales of our
Inherent Health brand of genetic tests. Year to date genetic test revenue was
$1.5 million compared to $352 thousand for the first nine months of last year.
It is important to remember that we recognize revenue when the genetic test is
completed and a report is issued. Contract research revenue decreased $198
thousand quarter to quarter primarily due to the completion in 2009 of our
reimbursable research projects with Alticor. We do not anticipate any further
contract research revenue with Alticor in 2010 and did not recognize any in the
third quarter of 2010. Deferred revenue at September 30, 2010 was $464 thousand
compared to $390 thousand at June 30, 2010 and $108 thousand at December 31,
2009.
Total
cost of revenue from continuing operations was $409 thousand or 75% of its
revenue compared to $305 thousand or 95% of revenue for the same period in 2009.
The significant decrease in cost of revenue as a percentage of revenue is
primarily attributable to higher genetic test revenue, which offset fixed costs
associated with the high volume genetic testing equipment we installed in
2009.
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Total
gross margin from continuing operations for the quarter was $136 thousand, or
25% compared to $18 thousand, or 5% for the same period in 2009. The increase in
gross margin is attributable to the substantial increase in genetic test revenue
I mentioned earlier.
Research
and development expenses were $427 thousand for the quarter compared to $873
thousand for the same period in 2009. The decrease is primarily attributable to
decreases in clinical trial expenses related to our research agreement with
Alticor and lower consulting and compensation expenses.
Selling,
general and administrative expenses for the quarter from continuing operations
were $1.1 million compared to $1.7 million for the same period in
2009. The decrease is primarily attributable to decreased promotion and product
development expenses and lower professional and consulting expenses. In addition
commissions paid to Amway as part of our merchant channel and partner store
agreement increased.
On
November 1, 2010 we were awarded two grants totaling $473,000 by the US
Government under the Qualifying Therapeutic Discovery Project Program to advance
the development of our OA and obesity-related research programs. The grant
program provides support for innovative programs that are determined by the US
Department of Health and Human Services to have reasonable potential to result
in a new therapy and reduce health care costs. The grant will reimburse us for
2009 and 2010 expenses according to the grant guidelines. We expect to receive
the awards in the fourth quarter of 2010 and the first quarter of
2011.
This
concludes my financial review and I will now turn the call over to
Lew.
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